Bipartisan Legislation May Permit Scout to Sell Cars in South Carolina | Carscoops

      The proposed legislation seeks to permit car manufacturers without dealer franchise agreements to sell directly to consumers.

      The company's SUV and pickup models are set to be produced at a $2 billion facility in South Carolina.

      Several lawmakers are advocating for changes to dealership regulations to enhance consumer choice and market freedom.

      Scout Motors has strongly asserted its right to sell directly to customers.

      Following our report indicating that Scout Motors would not be able to sell its upcoming electric vehicles directly to consumers in South Carolina, a bill has been introduced in the state's House of Representatives that could alter this situation. This legislation may also enable various other manufacturers to adopt a direct-sales approach, thus eliminating the need for a dealership network.

      The bill seeks to revise the South Carolina Code of Laws and has garnered the support of three Republicans and four Democrats, including Marvin ‘Mark’ Smith and Terry Alexander. It proposes to amend section 56-15-45 to allow car brands that operate a manufacturing facility and have never had dealer franchise agreements to sell vehicles directly to customers. According to the bill, this would “promote consumer choice and market freedom.”

      Politicians backing the legislative change emphasize that it would solely pertain to manufacturers without prior dealership agreements and would not aim to disrupt the existing dealership system.

      In a conversation with Auto News, E. Sims Floyd Jr., executive vice president of the South Carolina Automobile Dealers Association, stated that Scout simply “wants to compete against the dealers,” adding, “the essence of it is they want to change the law, there’s no compromise there.”

      Unsurprisingly, Scout is in strong favor of the proposed change in law.

      “We envision a future where Scout vehicles are made by South Carolinians, for South Carolinians, purchased directly from Scout Motors by South Carolinians,” a spokesperson commented. “Currently, outdated blanket government regulations make that impossible. Sadly, and ironically, those who construct Scout vehicles won’t be able to purchase them under existing laws.”

      The legislation was introduced on January 16 and has been assigned to the Committee on Labor, Commerce and Industry. The bipartisan bill must receive committee approval before it can be ratified and sent to the Governor, who needs to sign it for the changes to take effect.

      Scout Is Determined To Go Direct

      Scout Motors is following in the footsteps of Tesla, Lucid, and other companies seeking to sell their electric vehicles directly to consumers in the United States. These plans have sparked significant controversy among current Volkswagen dealers, many of whom feel entitled to market Scout products as part of the VW Group. However, Neil Sitron, Scout's general counsel, recently issued a robust rebuttal against the California New Car Dealers Association, which requested that the automaker abandon its direct sales strategy.

      In the correspondence, Sitron stated that the Volkswagen Group of America “is not authorized by Scout Motors to sell, and will not be selling or distributing, Scout-branded EVs in California or in any other state.” Scout also indicated it would vigorously defend itself if dealers pursued their threats to escalate the issue to court.

      The inability to sell its vehicles in South Carolina would be particularly regrettable for Scout since that is where the Terra and Traveler models will be manufactured. South Carolina approved $1.3 billion in funding in 2023 to assist Scout in establishing a manufacturing facility approximately 18 miles (29 km) north of Columbia.